Here is why understanding economics is important. India currently subsidizes fertilizer by an amount equal to 2.5% of its GDP (source). This subsidy is not just rent seeking. In an excellent paper describing the reasons people are averse to capitalism, they quote someone as saying...
"Attempts to remove such a subsidy [to fertilizers in India] have turned out to be politically
impossible and the majority of those opposing the removal do so not because they are
themselves adversely affected by it (as public choice theory suggests) but because they believe
that removing the subsidy will be bad for the economy."
Investigating Capitalism Aversion, published in Economic Policy in July of 2008.
Augustin Landier
David Thesmar
Mathias Thoenig
Subsidies do not create wealth, but instead forces society to purchase goods they do not want by producing goods that are valued less than they cost to produce. This is not wealth, this detracts from wealth. This is why we teach economics. This is why our job is important.
Monday, November 17, 2008
Blog Archive
-
▼
2008
(155)
-
▼
November
(67)
- 2008 AGEC 4213 Nerd of the Year!
- Trust Me: I'm Good For It
- Encyclopedia of Economic and Business History
- Green Energy
- Interesting Ag Facts
- Interesting Ag Facts
- Explaining Price Indices
- Beef, Pork, Chicken, and Egg Consumption: 1910-2006
- Corn and Gasoline Prices
- The Great Depression - Maybe We Learned Something
- Keynesian Perspective
- With Real Poets, It is Hard To Tell
- Ag Career Info
- Why Neoclassical Theory is Important
- It is more than that...
- Don't Forget...
- King Camp Gillette: Hero of Capitalism
- Gains From Trade...And Love
- The Importance of Insurance
- Oklahoma where the wind comes sweeping down the pl...
- Hereos of Capitalism
- Bird Spectacles
- Farm Animal Welfare: A Rare Statement of Truth
- Turkey Torture
- Explaining "Stimulus Package" to Students
- The Cow Tax
- The Market for Organic Eggs
- For Misplaced Southerners
- The Utility of Positive Emotion
- The Great Depression - We Learned Nothing
- Politically [un]Popular Ethanol
- Food Tales
- An Omnivore's Solution
- Cage Versus Cage Free
- The Cost of Happy Hogs
- The Importance of Economics
- Interesting Ag Facts
- American Socialism
- QLD livestock producers support fine increase
- Why Not Just Say "Farmer"
- The Pitfalls of Organic Food
- The Indifference Principle - In Practice
- Beef Prices in the 80's
- Broom Corn
- I, Broom
- Hello From Detroit
- God is Dead
- Laissez-Faire Higher Ed
- Secretary of Ag Michael Pollan
- The Fatal Conceit
- Steven Horwitz's An Open Letter to my Friends on t...
- We may begin hearing increased support for a bailo...
- Cattle, Hog, and Egg Prices: 1920-2002
- Steinbeck Talks About Food
- Sophistry
- Horrible Ideas
- Thinking About Graduate School?
- Economists Are Brilliant!!!!
- Thinking Like An Economist
- Picking Winners
- An Overview of the Agribusiness Degree
- Financial Crisis and Lending to the Poor
- Becoming a Great Teacher: Part 8
- We are all Socialists (1/3, at least)
- Trading Class Notes
- Humbling the Professor
- A New Approach to M.S. Theses
-
▼
November
(67)